Close Brothers 4.5%/4.75%

apt

You can get 4.5% fixed for two years or 4.75% fixed for three years with Close Brothers. A good headline rate, but quite a long time to tie up your money when rates may be rising.

http://www.telegraph.co.uk/finance/personalfinance/savings/5565870/Wealth-workout-Close-Brothers-strikes-gold-with-bond-at-4.75pc.html

nrsql

I took a 2 year @ 5% finishing 08 Jan 11.
Don't thinik I would take either of these offers now.
The 2 yr might be worth considering but not the 3 yr.

oldagetraveller

http://forums.moneysavingexpert.com/showthread.html?t=1764021

2 yrs, possibly, 3 yrs no!

theGrinch

LIBOR is pricing in rate rises by end of the year. To tie for more than 2 years may not maximise your income.

gozomark

4.75% for 3 years equates to 5.25% in the 3rd year, which I suspect will turn out to be a reasonable rate

skitskut

gozomark wrote: »

4.75% for 3 years equates to 5.25% in the 3rd year, which I suspect will turn out to be a reasonable rate

No because the interest isn't compounded, it is transferred by BACS to a nominated account each year.

gozomark

4.75% x 3 - 4.5% x 2 = 5.25%
therefore as per my post above

skitskut

Oh - I see where you're coming from now but you're assuming after 2 years you'll be getting no interest at all for the next year which isn't going to be the case.

gozomark

thats not what I'm assuming - I'm saying that the difference between the 2 year and the 3 year equates to getting 5.25% in the third year, and thats what you need to consider - is 5.25% in the third year likely to be attractive, (not 4.75%)

nrsql

Very slightly more than 5.25% as it's compounded (5.252% ish).
I tend to vslue things against ns&i indexed liked certificates.

i.e. do I think the tax free return from RPI + x without tying in to the term will be better than this product.

Also hear that ns&i will no longer jave to give value for money to the government coffers which might increase the rates (don't know how they can justify that).